PV of principalPV of interest payments selling price of bonddid bond sell at discount premium or face value ### Requirements:1) Calculate the PV of the Principal. 2) Calculate the PV of Interest Payments. 3) What is the selling price of the bond? 4) Did the bond sell at face value, discount, or a premium? ## Boxer Corporation's Bond Issuance and Present Value TablesBoxer Corporation is issuing $600,000 of 8%, 5-year bonds when potential bond investors want a return of 10%. Interest is payable semiannually.### Present Value Tables#### Present Value of $1This table provides the present value of $1 at different interest rates per period (Per.), ranging from 1% to 12%, over a span of 1 to 10 periods:| Per. | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | 9% | 10% | 11% | 12% ||------|------|------|------|------|------|------|------|------|------|------|------|------|| 1 | 0.990| 0.980| 0.971| 0.962| 0.952| 0.943| 0.935| 0.926| 0.917| 0.909| 0.901| 0.893|| 2 | 0.980| 0.961| 0.943| 0.925| 0.907| 0.890| 0.873| 0.857| 0.842| 0.826| 0.812| 0.797|| 3 | 0.971| 0.942| 0.915| 0.889| 0.864| 0.840| 0.816| 0.794| 0.772| 0.751| 0.731| 0.712|| 4 | 0.961| 0.924| 0.888| 0.855| 0.823| 0.792| 0.763| 0.735| 0.708| 0.683| 0.659| 0.636|| 5 | 0.951| 0.906| 0.863| 0.822| 0.784| 0.747| 0.713| 0.681| 0.650|

Present value of principal = Bonds payable x Present value of $1(5%, 10 years)

Boxer Corporation is issuing $600,000 of 8%, 5-year bonds when potential bond investors want a return of 10%. Interest is payable semiannually. Present Value of $1 1% Per. 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.980 0.961 0.943 0.925 0.907 0.864 0.890 0.873 0.857 0.842 0.826 0.812 0.797 3 0.971 0.942 0.915 0.889 0.840 0.816 0.794 0.772 0.751 0.731 0.712

Boxer Corporation is issuing $600,000 of 8%, 5-year bonds when potential bond investors want a return of 10%. Interest is payable semiannually. Present Value of $1 1% Per. 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.980 0.961 0.943 0.925 0.907 0.864 0.890 0.873 0.857 0.842 0.826 0.812 0.797 3 0.971 0.942 0.915 0.889 0.840 0.816 0.794 0.772 0.751 0.731 0.712

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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